22 Oct 2007

Walter Mossberg on the State of Cellular

As
reported
by a large segment of the Technorati crowd, Walter Mossberg recently
wrote a nice piece on the current state of the U.S. cellphone market,
and why it, for lack of a better word, sucks so much. The key is all in
the subsidized phone racket.

[The] whole cellphone subsidy game is an archaic remnant of
the days when mobile phones were costly novelties. Today, subsidies are
a trap for consumers. If subsidies were removed, along with the
restrictions that flow from them, the market would quickly produce cheap
phones, just as it has produced cheap, unsubsidized versions of every
other digital product, from $399 computers to $79 iPods.

I think he’s the first mainstream journalist that I’ve read who has
really gotten this. Phone locking, enforced mutual incompatibilities,
application restrictions – the entire culture of control – all springs
from subsidies. If people just bought their phones outright, they’d
probably be significantly cheaper (not to mention more full-featured),
there would be a greater secondary market (meaning less waste), and
they’d be more prone to shop for networks based on price, service, and
quality.

Perhaps as it becomes more obvious that the iPhone is, despite being (in
Mossberg’s words) “the best-designed handheld computer ever made,” a
costly white elephant because of carrier-mandated restrictions, there
will be greater national conversation about the state of cellular
telephony.

As Mossberg points out, we’ve been through this with landline phones
before, prior to the disassembly of AT&T as the national monopoly
carrier. It took almost a century for consumers to get first comfortable
with the technology, and then impatient with the restrictions placed
upon it: I don’t think cellular will take that long.